Multibagger Auto Sector stock rallied more than 21 per cent in few sessions only; Average daily volume is around 2 million

Last 5 years compounded sales growth is at 8 per cent, compounded profit growth is at 13 per cent, stock price CAGR is around 6 per cent

Indian markets showed strong strength and rallied around 700 points in last 5 trading sessions. In the same period Nifty Auto index also witnessed strong rally of more than 500 points and one stock from same sector, Minda Corporation Ltd grabbed the attention of D-Street investors by rallying more than 21 per cent in same period.  

Minda Corporation Ltd owned by Mr. Ashok Minda, is one of the leading automotive component manufacturing companies in India with a pan-India presence and international footprint. It provides electronic and mechanical security system to two-wheelers, three-wheelers and off-road vehicles. The firm offers safety, security and restraint system, driver information telematics system, interior system and aftermarket products.   

Key customers of the company include Ashok Leyland, Bajaj Auto, CNH, Hero Moto Corp, Honda Motorcycle and Scooter India, Hyundai, Mahindra & Mahindra, Maruti Suzuki, Suzuki Motorcycle, TVS Motor, Tata Motors, VE Commercial Vehicles, Yamaha Motors.  

Last 5 years compounded sales growth is at 8 per cent, compounded profit growth is at 13 per cent, stock price CAGR is around 6 per cent and the company’s debtor days are also continuously improving.   

Technically stock is trading in consolidation range of Rs.287 to Rs.163.5 by making lower highs and equal lows from April 2022. Recently stock rallied more than 21 per cent in last 5 days with average volume of 2 million per day. This action registered a breakout of continuation pattern on daily charts.    

All short-term and long-term moving averages and 14-day period RSI are placed in bullish zone. Delivery volume of Breakout candle on daily charts is nearly 40 per cent. After such marathon move, it may take some rest and consolidate here but after that can expect strong follow up buying activity.  

Investors looking for opportunity in auto sector can add this stock to their watchlist.